Editor’s Desk - aiubof.in means accepting new assignment with challenges. ... Balance Sheet Analysis, FEMA, Knowledge ... cover of `.30000/- will not be available in accounts opened

For Internal Circulation only 1

Volume 4 March-April 2015

WHEN GIVING PROMOTION IS A COMPULSION! I always believe promotion is a motivation. Promotion means

higher responsibility. Promotion is an updation of knowledge.

Promotion means accepting new assignment with challenges.

But see the recent trends in Public Sector banks. From 1980 – 2003 there was virtually ban on

recruitments in Public Sector Banks. The sudden spurt came from 2005 to 2011. Again

recruitment is not at all matched with mass retirements. See the irony, after nationalization of

banks, branches have increased by leaps and bound. Business has increased in tremendous

proportion. But manpower that too qualitative & experienced manpower in nationalized banks in

India is decreasing steadily.

During 1980 – 1996, the promotions in Scale I, II, III, IV, V, VI & VII required more than 30

years & now from Scale I to V requires 11-13 years. In 1980 – 1996, posts declared for

promotions were in two digits & from 2003 – 2013, promotional vacancies were in 500-600 even

it sometimes touched 1000 & above in Scale I to II & II to III.

Probably it is required due to sudden spurt in economy, more no. of retirements, opening of new

branches etc. etc. but what about banking knowledge!!! So in the new era promotable staffs are

more in number but may not be postable due to poor quality as per requirements of the bank. So

effectivity of PMS is easily very much questionable in present form in Indian public sector

banking.

Previously in every big branch and in administrative offices would have two-three officers

who were considered to be the living reference book of banking. They might be in Scale I, II

or III but what is the position now? Officers even in Scale III, IV, V & VI are far from

satisfactory qualitative banking knowledge.

From the

Editor’s Desk


The best example is most of the upper scale officers on promotion are very shy in credit and

foreign exchange. They don’t want to use their delegated authority. More over the new

generation executives wants their posting only in administrative offices and not in branches.

Some of the future aspirants in Scale I, II & III also prefer to work in administrative offices,

audit department & vigilance department. So that actual burnt & learning from the field should

be avoided at all costs. This problem is aggravated due to absence of job card in each

department at branch and administrative office levels. Very truly, in Nationalized Banks, Fool

proofing of employees are not being done by the HR Department since long.

In present day situation in Public Sector Banks, promotion process is a ritual which comes every

year that to like mass marriage. For example, 600 promotional posts from Scale I to II, 750

from Scale II to III. In such a situation either the number of candidates is 1:1 or 1:1.25, hence

quality and knowledge are the only casualties . In terms of promotion, now organization is

getting a bunch of people who are aspiring for further promotions without owning real

responsibilities, job knowledge and performance criteria. I have no hesitation to accept that

H.R. Policy of the PSU banks are so obsolete and redundant that there is no difference between

opportunities lost due to lack of knowledge or lack of initiative on the part of the employees.

The rule of the road is decision takers are being punished if they are doing any mistake. More

preciously risk appetite is being subjected to punishment & criticism.

In today’s parlance, it is now a myth that computer knowledge is the only knowledge which

drives Indian banking. Neither you need to know NI Act, Company Act, Balance Sheet Analysis,

FEMA, Knowledge about Mortgage, Partnership Act etc. etc. nor you need direct customer

orientation. In this parlance the great marketing Guru Mr. Peter Drucker’s statement is very

relevant. “We are in such an event which occurs in every 200-300 years when people don’t

understand the world anymore. When past is not sufficient to explain the present.”

It is therefore, a foregone conclusion that in Public Sector Banks, talent pool is sinking and it is

sinking fast. In the name of recruitment, academic qualifications like CA/MBA/MCA/

Engineering so on so forth may not save the banks. More so, if promotion is a compulsion then

neither it is good for the individuals nor for the institution like banks.

Competition, performance in real terms, job knowledge, wish to share responsibility, forming an

environment where knowledge experience and decision making must be encouraged, then only

promotion will translate into performance. We must percolate in all scales and in all promotions

in PSU banks the following mantra:

- As a successful PSU banker, we must learn to live with following doctrines:-

1. Charity with Clarity.

2. Profitability with human face.

3. Mass banking with quality assurance.

4. Capital protection with increase appetite for market share.

5. Customer’s satisfaction with knowledge supplements of staff members.


I wish bank management will work earnestly to “stop shifting of responsibility syndrome” so

that Promotion without knowledge and competition should stop immediately. Rather promotion

should be earned and promotion must translate into growing the business in real terms. Then

only promotion will be rewarding experience both for individuals & PSU Banks also.

Editor - Debasis Ghosh

Prime Minister of India announced the scheme “Pradhan Mantri Jan-dhan Yojna on

15th August 2014 & launched the same on 28th August 2014.

Branches were advised to open the accounts through e-kyc wherever aadhaar

number is available. It is safe for bank staff as bank get authentic details from UIDAI

regarding photo & address of the customer. No other Photo ID / Address proof is

required when the address is same.

Bank has issued a circular no.9835 dated 24th February 2014 containing guidelines of

KYC Norms for opening of accounts through e-KYC recognizing online Aadhaar

authentication to be accepted as an “Officially Valid Document” under PML Rules.

Overdraft up to Rs.5000/- in PMJDY Accounts

Modalities of Scheme Purpose General purpose loan to provide hassle free credit to low income

group / underprivileged customers to meet their exigencies

without insistence on security.

Eligibility A) BSBDA Accounts only, which are operated satisfactorily for

at least six months under PMJDY.

B) OD to be granted to the earning members of family,

preferably women of the house.

C) There should be regular credits under DBT / DBTL scheme

/ other verifiable sources.

Pradhan Mantri Jan-Dhan Yojna


D) Account should be seeded with AADHAAR for avoiding

duplicate benefit.

E) BSBDA account holder should not be maintaining any

other SB account with any bank/branch to ensure

compliance with RBI directives.

F) Age of applicant should be between 18 years to 60 years.

G) (Not Eligible:- Minor, KCC/GCC borrowers, more than one

member of the same family, Member of SHG/JLG’s or MFI)

Nature of Facility Running OD facility in SB Account

Period of

Sanction

36 Months subject to annual review of the account.

Loan Amount a) 4 times of Average Monthly Balance

b) Or, 50% of credit summations in account during preceding

6 months

c) Or, `.5000/- whichever is lower

Minimum `.500/- Maximum `.5000/-

Security NIL

Interest Rate Not exceeding 2% above base rate i.e. Base Rate + 2%.

Processing Fee NIL

Sanctioning

Authority

Branch Head

Disbursement Withdrawals through Branch / BC / ATM / POS

Documents Loan application-cum-Undertaking (As approved by IBA)

Arrangement letter duly accepted by the Account Holder

(As approved by IBA)

Demand Promissory Note – Appropriate revenue stamp to

be affixed

Letter of Continuity – To be stamped as per stamp act.


Inspection &

Follow up

Inspection waived for all standard assets. All irregular accounts

to be followed up closely.

Other Features Mobile Number of the borrower / family members to be kept on record.

Aadhaar number will remain seeded with NPCI during the period of loan. Move-out of Aadhaar for such account will be restricted by NPCI.

SBOD account will become primary account to receive all subsidies / benefits. DBT should also be frozen to such accounts till the currency of loan. DBT / DBTL credits will credit in this account only.

NPCI will provide repository of aadhaar seeding for SBOD to the banks to verify any earlier seeding.

Loan accounts will be subject to IRAC norms of RBI. Classification of Account:- The account should be classified

under priority sector advances (other category) as also weaker section provided the annual household income of the borrowers in rural areas does not exceed `.60000/- and in the non rural areas it does not exceed `.120000/-.

Due Diligence of account holder:- Usual due diligence of applicant to be carried out and to be kept on record.

Financial Literacy:- Financial Literacy to be provided to the loanee while sanctioning the loan emphasizing importance of availing need based credit and timely repayment of overdraft.

Renewal of overdraft limit:- Annually Renewal of overdraft limit is to be considered only after completion of one year of sanctioned limit in the account.

Credit Appraisal:- It is to be done as in any other loan application is being done.

Credit Guarantee

Cover

Guarantee cover up to 60% of default amount in PMJDY

Banks will pay guarantee fee @1% on loan outstanding at

the end of each year.

(PMJDY document provides creation of a corpus of `.1000 Crore

for default in PMJDY OD scheme. DFS guidelines are awaited on

this account and also the entity managing such fund and claim

process)

No overdraft is to be granted in BSBDS account as they are not KYC complied and

valid for one year only and Aadhaar is not linked with the account.


Satisfactory operation in the account means minimum 03 transactions in account

during last 06 months.

For sanction of Overdraft, Branch has to verify the eligibility criteria of above said

guidelines and each & every condition must be fulfilled by the applicant.

Please note that the period of 6 months is calculated when we are sanctioning the

overdraft facility, if overdraft facility is sanctioned in March 2015 we have to consider

last 6 months i.e. 1st Sep. 2014 to 28th Feb. 2015 for average balance calculation and

satisfactory operations in the account.

Finacle Menu – ODPMJD (Five sub options)

R – Indent for OD in PMJD

P – Verify indent for OD

E – Modify account limit

V – Verify account limit

C – Cancel

First detail of account where OD is to be given is to be entered using menu

“ODPMJD” and verified. In backend process, the account details will be sent to NPCI

to check eligibility of OD based on customer OD facility availed by customer from

other bank(s) if any. On receipt of communication from NPCI, system will permit to

enter eligible OD limit through “E” option.

Instruction Circular No.8-2015 dated 09.03.2015 – Loan application-cum-undertaking

for overdraft in BSBD accounts under PMJDY & letter of Arrangement is annexed with

this circular.

Circular letter no.1026:2014 dated 16.02.2015 of Financial Inclusion Department

It is clarified by DFS that Banks should not refuse opening of new accounts under

PMJDY after 26.01.2015 and continue to open accounts in normal course and issue

Rupay Debit Card. However, it should be made clear that benefit of life insurance

cover of `.30000/- will not be available in accounts opened after 26th January 2015. If

any person is not having address proof, his / her account can be opened under

BSBDS scheme.

Circular No.8977 dated 05.02.2015

Contains Revised claim form under Life Insurance Cover of `.30000/- for PMJDY

accounts.


It is to keep labour unions away and make the employees feel important

Want to become an "officer"? Try to get a job in Axis Bank. All the 42,420 people who worked for the third-largest private sector bank in the country in 2013-14 were designated as officers. Kotak Mahindra Bank and Yes Bank are some of the other leading banks that had a similar employee profile.

In private banks, only 21 per cent of the nearly 300,000 employees fall in the category of clerks. Foreign banks, with only 6 per cent clerks among their ranks, have always preferred to hire more officers. This skew means that the entire banking system in India is now biased towards officers. An exception is ICICI Bank, the largest private bank, where nearly 55 per cent of employees were clerks in 2013-14.

Of the 1.15 million employed by the scheduled commercial banks in 2013-14, more than 600,000 were officers. However, the country's largest bank, State Bank of India (SBI), still has more clerks than officers on its rolls. Nearly half of the bank's approximately 200,000 employees are categorised as clerks, according to the latest data with the Reserve Bank of India, or RBI. But even that represents a big change.

"In 1975 when I joined the banking system, a branch with 20 employees used to have not more than three officers, the rest being clerks," says SS Shishodia, president of All India Bank Officers' Association. "The entire banking system used to have the same officer-clerk ratio. Now the ratio is close to 1 in PSU banks."

On the face of it, the private banks' preference for officers may seem cosmetic. "It is just a question of how you designate your employee," observes a senior executive of a leading private bank who does not want to be named. "Some private banks prefer to describe sales executives and others doing similar tasks as officers, when others would put them in the category of clerks. It depends on the human resource policy of a particular bank."

Why banks now have more officers

and fewer clerks


HIRING TRENDS

52 per cent officers in the banking system now as opposed to just 38 per cent ten years ago

Most private sector banks hire officers only

Technology has rendered clerical functions redundant

Officer-only model driven by the desire to have better industrial relation

Clerks and only junior level officers allowed to go on strike

The new approach has pushed up the average employee cost of PSBs

But there are others familiar with the banking system who says that the bias for officers is easily explained. The change in the employee profile has been necessitated by computerization of the banking system, which has rendered clerical functions almost redundant. "Earlier, clerks would make an entry and officers would check and authorize transactions. It was known as the maker-checker model," explains a PSU bank official. "Now that most of the banking system is computerized, there is no need to check transactions manually." Keeping unions at bay The preference for boosting the officer rank also arises out of the fear of active unionism. Shishodia points out, "The policy of recruiting more officers means the private banks do not want unions in their establishments." This perhaps explains why none of


the large private sector banks has an employees' union. In the case of nationalized banks, higher-ranked officers are not allowed to go on strikes, say union leaders, that prerogative being reserved for clerks and officers falling in Scale 3 or below. The public sector banks are now starting to hire fewer subordinate staff, but this has its costs. It has pushed the average cost of employee in PSU banks to a level even higher than in private banks. According to a Boston Consulting-Indian Banking Association report, the average employee cost of public sector banks has been rising steadily since 2008. In 2010, it stood at Rs 5.6 lakh, slightly higher than the average cost of employee in private banks, which was Rs 5.3 lakh. The report adds that "about 62 per cent of the costs of the public sector banks comprise employee costs, as against 37 per cent in the private sector". The other side A banker points out an additional benefit of hiring more officers: "It gives new employees a sense of responsibility. Once that happens, they do not insist on fixed working hours in pursuit of achieving targets." Unfortunately, this aspect has not reflected on an increased efficiency in PSU banks. RBI's "Report on Trend and Progress of Banking in India 2012-13" noted that "for public sector banks, which account for the largest share in the Indian banking sector, the average efficiency scores were above that of private sector banks over a major part of the period under consideration (2000 to 2013). However, they lagged slightly behind the scores of private sector banks after 2010." Bankers working with nationalized banks are of the view that the twin factors of achieving operational efficiency and better labour relations may have led banks to hire more officers than clerks. "Officers are required to work 24/7. There is no provision for additional work incentive for them." However, in the case of clerks, you are required to pay overtime and conveyance allowances if you keep them at work even for 10 extra minutes. "We work on Sundays and many times on holidays, and we are not paid overtime," says an officer of a public sector bank. While the probability of strikes by disgruntled staff may come down in PSU banks, operational efficiency is possible only after thorough restructuring of existing processes. This is what an official committee looking at human resource issues in public sector banks in 2010 had alerted the government to. Its report said, "Nearly 90 per cent of the staff in PSBs is deployed in branches and the rest in administrative offices. Over 60 per cent of the time of branch staff is spent on non-customer facing roles and less than 10 per cent of the staff is devoted to proactive sales. There is thus perpetuation of routine clerical content in branches even after the introduction of technology. In view of impending nature of new sales and service roles, such disproportionate allocation of roles on routine activities is dysfunctional to productivity enhancement and customer focus." Courtesy: Mayank Mishra, April 17, 2015 (Business Standard)


Central IR Meeting of the Federation with the Management after being invited by the

Management to the Federation leadership held at Central Office, Mumbai on 18th March 2015.

Shri Debasis Ghosh, General Secretary, along with all Vice Presidents namely Shri Prabhat

Saxena, Shri N.N. Abhang, Shri R S Dhaka, Shri Swaran Dass & Shri K. Surendran and Shri M.V.

Gadre, Jt. Gen. Secretary, Shri Ravi Kuveskar, General Secretary (Mumbai), & Shri S.K. Pathak,

General Secretary (Jharkhand) has represented the AIUBOF. Whereas Ms. Hemlatha Rajan,

GM (P&HR) represented the Management and was accompanied by Shri R. P. Waykul, DGM (IR),

Shri R. R. Mohanty, DGM (P), Shri Atul Kumar, AGM (PAD), Shri A. N. Shukla, Chief Manager

(IR), Shri Vikram Lawangare, SC/ST Representative.

Ms. Rajan accorded a warm welcome to the participants. The Federation leadership first

discussed the pending issues which were taken up in the previous meetings but decisions taken

thereon were still not implemented. It was assured by the Management that the pending issues

would be cleared soon.

While discussing on the promotion process from Scale I to II and II to III for the year 2014,

the Management stated that the promotion process would commence after the outcome of the

Review Petition filed before the Supreme Court. The Federation requested to conduct

recruitment of officers and clerks to meet the continuous shortage being created by high rate

of retirement and attrition. The Management informed that the process was already in the

pipeline & efforts are being made to resolve the present situation.

The Federation sought for financial compensation, along with giving compensatory off to the

officer working in service branch as there are limited holidays under NI Act. The Federation

also asked to work out a solution for the holidays of service branches, as the holidays are not

common across the states.

On Federation’s request of extending the tenure of repayment of staff housing loan upto 70

years of age, as some banks were doing, the Management replied that such provision may not be

feasible at this juncture. Some other clarifications regarding change of security and

percentage of limit for purchasing the plot were also sought by the Federation and provided to

the Management for rethinking on this issue.

The sentiments of the Federation regarding unaccomplished infrastructure in newly opened

branches without sufficient staff was conveyed to the Support Services Division with a demand

Central IR Meeting


that Top Management should lay special emphasis in resolving this issue.

The Federation leadership urged the Management to review our lease rental policy as the

monthly rent on leased premises was last reviewed in 2012, it had also been brought to the

Management’s notice that the peer banks have already increased lease rental for the officers.

The Federation strongly represented the point of enhancement in the existing limits of various

perquisites like entertainment expenses, conveyance, newspaper expenses etc. in order to boost

the morale of the officers. The Management assured that the matter would be examined.

On the issue of revision in the ceiling limit of the officers’ furniture and fixtures, the

Management asserted that the revision was not feasible as of now. Further, the decisions taken

on several issues during last meeting but not implemented so far were also taken up by the

Federation leadership and early action was sought.

The meeting concluded on the cordial note and the Federation leadership hoped that the

decisive initiatives taken by the Management during the meeting would be implemented in good

time.

Minutes of the meeting are circulated vide Staff Circular no.6184 dated 9TH April 2015.

ORGANISATIONAL DEVELOPMENTS West Bengal & Sikkim Unit West Bengal & Sikkim Unit, under the leadership of Com. Tapas Nag & Com. Deobrat Dass,

General Secretary and President of the unit respectively had arranged an officer’s meet at

Siliguri on 8th of March 2015where your General Secretary was invited to attend the occasion.

Majority of the Officers from Sikkim Branches and Northern part of West Bengal were

present there.

Your General Secretary of the Federation had also visited the remote branches namely

Jalpaiguri, Dhupguri, Deshbandhupara, Falakata, PundiBeri, Coochbehar, Dinhata etc. to meet

the officer members. Members were very jubilant & discussed their problems with the

undersigned and also expressed their satisfaction that first time in the history of the

Federation; All India General Secretary had visited such remote branches to meet the

members. The undersigned has already taken up with G.M. Kolkata regarding acute manpower

shortage in these areas and about compassionate transfer of some genuine cases.


PUNJAB UNIT On 1st of April 2015, our Punjab unit had arranged a gala farewell as well as welcome function

of Sh. S.S. Bimbh (outgoing Regional Manager of Ludhiana on superannuation) and the new

incumbent Sh. V.K. Singhal (New DGM, Ludhiana). Your General Secretary was also invited on

this occasion. Almost all the officers of Ludhiana Region were present. The other dignitaries

were present in the occasion were Sh. Guglani (Regional Head, Jullundur), Sh. Buta Singh (Ex-

G.S. of Punjab), Sh. Ranbir Singh (Ex-GM of Pune). The function was a grand success under the

leadership of Com. I.J.S. Sodhi, the President of the Punjab Unit and Com. Swaran Dass, the

General Secretary of of the Punjab Unit & Vice President of our Federation.

BIHAR UNIT Our Bihar unit was visited by the undersigned on 4th & 5th April 2015. A mammoth gathering of

officers was at Patna on 4th evening at Hotel Samrat. On the same day, Your General Secretary

has inaugurated the Association Office at Patna. This is a laudable initiative made by Com. Priya

Ranjan Kumar, General Secretary of Bihar and his team. In the Officers’ meet Sh. Birender

Kumar (Ex-GS of Bihar Unit), Com. R.D. Yadav, President of the Bihar Unit, Sh. Arora, AGM

Audit, Com. Priya Ranjan Kumar, General Secretary of the Unit and your General Secretary of

the Federation has addressed the gathering. The undersigned has interacted with one and all

present in the meeting.

Next day Nalanda Branch was also visited. Under the able leadership of Com. Priya Ranjan

Kumar, it is expected that Bihar Unit will be more vibrant, progressive and democratic in their

working in coming days and will achieve many more milestones.

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www.aiubof.in Please keep the track on Wage Negotiation

through our website. It is updated on daily

basis.

Be united to achieve all the logical demands

for the officers’ as a class.

Bulletin of the All India Union Bank Officers’ Federation ***************************************************************

Edited & Published by Sh. Debasis Ghosh, Editor for and on behalf of All India Union Bank Officers’

Federation, 26/28-D, Connaught Place, New Delhi-110001

Magazine will be published through Web Site henceforth and no charges will be levied

The views expressed in the different write-ups in this bulletin are not necessarily those of the Federation

EDITORIAL BOARD

Mr. Debasis Ghosh – EDITOR Mr. Shyamal Chaterjee – SUB-EDITOR, Mr. R.S. Dhaka – Convener

Members – Mr. Prabhat Saxena, Mr. V.K. Kaul, Mr. Amarjit Singh,

Ms. Sonia Rai, Mr. Nepal Das